Guidelines on preparing a business plan

Introduction

When completing an Application Form/Business Plan it is important to provide as much relevant information as possible otherwise delays will occur if matters have to referred back to you for further information/clarification.

 

It is preferable to have the application/business plan typed or alternatively written in block capitals with a black pen.

 

The following paragraphs contain a general list of guidelines in preparing an application/business plan.  It is not possible in one document to provide for every contingency that might arise in preparing an application/business plan, as each project will have different questions to answer and information specific to that project to provide.  It is possible, therefore, that having completed your application/business plan, it will be necessary to refer matters back to you for further information/clarification.

 

1.         Executive Summary

This should be concise and clear.   Basic information relevant to the proposal should be provided.

The Reader/Investor must be encouraged to continue reading.

 

2.         Name and Address of Applicant

State clearly the name, address and telephone number of the applicant.  If the        applicant is a limited company, details of authorised and issued share capital        together with details of the principals of the company must be given.

 

If the applicant is a partnership, likewise, details of the principals in the      partnership must be given.

 

3.         Project Description

(a)     If the applicant is operating an existing business, it is important to outline the details of the business.  This should include the start-up date, the services being provided or the products being produced.

 

(b)     A detailed description of proposed new products or services must then be given.  It should be clearly stated if the existing business is to continue in conjunction with the proposed new business or if the proposed expansion will replace the existing business.

 

(c)     If this is a new start-up business, a detailed description of the products to be manufactured or the services to be provided should be given.

4.         Location of Project

State where the project is/will be located.

5.         Promoter's Qualifications, Work and Business Experience

It is important to provide a detailed Curriculum Vitae of the applicant or    applicants.  This should include a record with dates of :

(i)         Education and Qualifications

(ii)        Training Courses

(iii)       Work experience.

It is also important to list the age profile of the applicant/applicants.

6.         Existing Assets

If this is a new business, there may be no existing assets involved.  This should be stated.  However, in some instances, the applicant may be running a business in a part-time capacity or as a hobby and may have existing assets.  Likewise, with an existing business it is important to list all the main assets and to itemise the cost of each and state how they were funded  i.e. Were they grant aided? How much was provided from the Promoter's own cash?  and the level of any borrowings.  Where there are existing borrowings, the date(s) the loan(s) was (were) drawn down, the amount of the loan(s), the repayment period(s) and the amount of the repayment(s) must be stated.  e.g.  Borrowed €6,000 (rate of interest 11%) - (5 year term loan) repayments @ €35 per week.

7.         Projected Capital Investment

It is important to list here all investment in capital items whether or not these capital items can be grant aided.  Capital items include the following:

(a)        Site purchase.

(b)        Site development.

(c)        Construction of new workshop/premises or repairs/refurbishment to existing workshop/premises.

(d)       The purchase of new machinery and equipment (each piece of equipment must be listed separately and it must be stated whether the proposed equipment is new or second-hand.

(e)        Purchase of  transport.

 

It should be noted that site acquisition, the acquisition of premises/workshop or the purchase of transport, are ineligible for grant assistance.  However, the cost must be included in the capital investment profile.

Example:

a)         Purchase of Site (1.2 acres)                 -             6,000

b)         Site development work                       -             1,500

c)         Construct Workshop (1500 sq. ft.)     -           17,000

d)         Purchase of equipment                        -             5,500

-           Welder (s/h)    -           1,400

-           Lathe (s/h)       -           2,000

-           Press brake (s/h)          1,600

-           hand tools (n)  -              500

e)         Purchase of S/h Van                           -            3,000

Total   -           33,000

 

8.         Proposed Source of Funding

This section should clearly state how the above capital investment is to be funded.

Example:

Grant (50% of (b), (c), (d))     -           12,000

Term Loan (5 yrs)                   -           12,000

Savings                                    -             9,000

Total   -           33,000

 

9.         Employment

 

It is important to give as much information as possible when completing this section.

Example:

 

PRESENT

FUTURE

 

YEAR 1

YEAR 2

YEAR 3

Full time

Nil

1

2

3

Part time

Nil

1

1

Nil

Seasonal

Nil

Nil

1

2

 

The above employment figures include the applicant.

 

Year 1

Full time - the applicant @ €275 per week =    €14,300 p.a. (1)

Part time - 2 days a week @ €55 a day        =    €5,720 p.a. (2)

 

Year 2

Full time (1) applicant @ €300 per week      =  €15,600 p.a. (3)

(2) 1 Staff @ €230 per week         =    €11,960 p.a. (4)

Part time - 1 Staff - 3 days per week @ €55 a day

=    €8,580 p.a. (5)

Seasonal - 1 Staff, full time, May to September

@ €192 per week (22 weeks)     =   €4,224        (6)

 

Year 3

Full time - (1) applicant @ €300 per week    = €15,600 p.a. (7)

(2) 2 Staff @ €230 per week        = €23,920 p.a. (8)

Seasonal: 2 Staff, full time, May to September

@ €192 per week (22 weeks)       =   €8,448 p.a. (9)

 

Summary of Drawings and Wages (see Paragraph 10 - items 3 and 4)

 

Year 1             Year 2                         Year 3

Drawings                    €14,300(1)       €15,600 (3)                  €15,600 (7)

Staff Wages               €5,720 (2)        €24,764 (4+5+6)         €32,368 (8+9)

 

10.       Competition

It is important to know who your competitors are and what products/services         they offer.  A list of your competitors, both direct and indirect, should be        listed.

 

11.       Markets

In completing this section the following matters should be addressed by you:

(i)         What research have you undertaken to indicate that there is a market for your        product or service?

(ii)        How has this research been undertaken? e.g. by way of questionnaire,         interviews, surveys, observations or using an outside consultant.

(iii)       Where do your potential customers already obtain the product or service that         you propose to provide?

(iv)       What convinces you that your product will be purchased by the customer   rather than the product of your competitor?

(v)        Who are your potential customers?

(vi)       Do you know the size of the market for your product or service and what   percentage of that market do you hope to obtain?

(vii)      What geographic area will be covered by you or where will your customers             come from?

(viii)     How will you address any changes in technology that would make your     product or service less appealing to your customers?

(ix)       How are your products/services to be distributed?  How did you decide on this     particular method of distribution?

(x)        Describe your promotional strategy?  What is your promotional budget for the       year?

 

12.       Sales/Profit

If there is an existing business, the audited accounts for the previous three years will be required (or lesser if the business has been in operation for a lesser period).  New and existing businesses will be required to submit projections for cash flow, Profit and Loss, and Balance Sheet for the next three years of operation, if the Grant Assistance sought exceeds €6,350.  Applicants for Grants of €6,350 or less will be expected to submit projections for Profit/Loss only for the next three years.  It is important to outline how the projected figures have been derived.  (See example hereunder)

 

Example:

   

ACTUAL

PROJECTED

 

YEAR TO

 

YEAR 1

YEAR 2

YEAR 3

  1 SALES  

65,0000

143,000

182,000

     

  COST OF SALES  

  2 Raw Materials  

26,000

57,200

72,800

  3 Drawing  

14,300

15,600

15,600

  4 Staff Wages  

5,720

24,764

32,368

  5 Phone and Fax  

1,780

3,200

3,800

  6 Electricity  

2,160

4,500

5,600

  7 Insurance  

660

1,200

1,500

  8 Advertising  

1,200

1,200

1,200

  9 Transport  

2,160

4,500

5,700

10 Printing and Stationery  

190

250

250

11 Loan Repayments  

  3,720

    3,720

    3,720

12 Accountancy  

1,200

1,200

1,200

13 Depreciation  

  1,000

    1,000

    1,000

14 Local Authority Charges  

1,000

1,000

1,000

14 Miscellaneous Charges  

1,000

1,000

1,000

14

TOTAL COST OF SALES

 

62,090

120,334

146,738

15

NETT PROFIT

 

2,910

22,666

35,262

 

NOTES ON PROJECTIONS

 

1.  Sales           Year 1 -           200 items @ €325       =            65,000

Year 2 -           440 items @ €325       =          143,000

Year 3 -           560 items @ €325       =          182,000

 

2.  Raw Materials      - Averages @ 40% of Sales.

 

11.  Loan Repayments

€12,000 (5 year Term Loan @ 11%) repayments @ €3,720 p.a.

 

13.  Equipment valued @ €5,000

annual depreciation @ 20%         =          €1,000 p.a.